Focus Area: Economy
Staff Contact: Jamie Robichaud / Kate Messer
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title:
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Report on a request by OFI Manager, LLC and assigns for a request for the issuance of industrial revenue bonds and tax phase-in for a single series issuance for two industrial warehouse/office facilities. The project will entail the construction of 260,870 and 80,000 sq ft of industrial space on a 60-acre site east of the intersection of Monticello Dr & Erickson Road.
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recommended motion:
Accept report. A public hearing and resolution regarding the project will go before the City Council at its June 2 meeting.
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Summary:
The City has received an application for $46,800,000 in industrial revenue bonds for the construction of two facilities totaling 340,870 square feet of industrial office/warehouse space. The project is located on 60-acres to the east of the Monticello Drive & Erickson Road intersection and located adjacent to several existing facilities developed by the applicant. This will be a single-series of bonds to be issued to cover land, the building and other development costs
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The Applicant requests a 10-year / 80% property tax phase-in in conjunction with the issuance of the City’s industrial revenue bonds. This project is applying and qualifies under the City’s tax abatement policy (Policy F-5, Resolution 25-1099) based on existing business requirements of an investment of at least $5 million.
This project has requested bonds not to exceed $46,800,000 for two buildings totaling 340,870 square feet on 60-acres. The single series request of industrial revenue bonds consist of:
o $4,700,000 to acquire land
o $39,725,000 to construct the building
o $2,375,000 for other development costs associated with the project
• The project will create 250 new jobs over the next 10 years
o Average salaries of the new jobs:
§ $62,00 in the first year, growing to $96,958 in year 10
o A total of approximately $150 million in new wages during the abatement
• Property taxes over the 10-year period with estimated 80% property tax phase-in on the project:
o All jurisdictions = $150,375 annually / $1,503,750 10-year total (excluding the 8 mills for schools that are exempt)
o Olathe = $30,300 annually / $303,000 10-year total
o Olathe’s current annual property tax revenue from the properties is $144.
o Upon retirement of the tax phase-in, the City will receive approximately a total of $151,670 in annual property tax revenue once the property tax phase-in expires.
The cost-benefit ratio of this project for the City is 1.03 with payback expected to take approximately 10 years.
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Financial Information:
See attached materials for more detailed fiscal impact information.
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Attachment(s):
A. Executive Summary
B. Application
C. Firm Data Sheet
D. Project Cost Benefit Analysis
E. Site Aerial and Site Plan
F. Resolution No. 26-XXXX